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ACCA Applied Skills · Taxation (UK) · The scope of corporation tax

Hollis Ltd, a UK resident company, has a trading loss of £45,000 for the year ended 31 March 2026. For the same year it has property business income of £20,000 and a chargeable gain of £15,000. It makes a current-year loss claim against total profits and has no other income or reliefs. What is the amount of the trading loss remaining to carry forward?

£10,000 is carried forward. A current-year loss claim is set against total profits, including the chargeable gain, so it absorbs £35,000 of property income and gains. The remaining £10,000 of the £45,000 loss is carried forward.

  1. A£10,000Correct
  2. B£0
  3. C£25,000
  4. D£30,000

Explanation

Total profits are £20,000 + £15,000 = £35,000. A current-year claim against total profits is set against the full £35,000, which leaves taxable total profits of nil. The loss remaining is £45,000 - £35,000 = £10,000. Using only the property income would wrongly leave £25,000.

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